Starting in 2015 farmers have an Affordable Care Act reporting requirement if they have 50 or more employees or have less than 50 employees and a self-funded healthcare plan. As an applicable large employer (ALE’s) you are required to file the appropriate forms by January 31, 2016 to employees and to the IRS by February 29, 2016 if you paper file or March 31, 2016 if you e-file even if you don’t offer insurance.
“Farmers with 50 FTE (full-time equivalent) employees are required to file Forms 1094-C and 1095-C for 2015,” says Tonya Rule, Senior Tax Manager with Eide Bailly. “This requirement is for farmers even if they meet the Mid-Size Employer Transition Relief.”
The Mid-Size Transition Relief basically says farmers will not owe any penalties if they meet certain requirements like having 50-99 FTE’s without reducing the size of their workforce after 2/9/14 unless it’s for a bona fide business reason Rule says. While farmers who meet these standards may get out of penalties, they don’t get out of filing the appropriate forms.
“There is a huge misconception out there that employers meeting this relief do not have to file the forms. Unfortunately that is not true,” she says. “The forms are still required the relief just gets those employers out of the ‘pay or play’ penalties.”
It’s important to note that you must provide each fulltime employee with a copy of the 1095-C by January 31, 2016. Rule says this helps the IRS to determine which employees are ineligible for a premium tax credit on their individual return.
The penalty for not filing the appropriate forms could add up.
“The penalties range from $50-$250 per 1094-C and 1095-C (and 1094-B and 1095-B),” Rule says. “The penalties are capped at $3 million for businesses with average annual receipts of greater than $5 million. For everyone else the penalties are capped at $1 million dollars.”
While penalties will be waved for employers acting in good faith this first year Rule says filing the forms late exempts you from that waiver.
“Don’t forget penalties are not deductible,” she adds.
Talk to Your Accountant
Rule recommends farmers ask the following questions:
Am I considered to be an applicable large employer (ALE)?
If I am, does the Transitional Relief for determining this apply to me?
If I still am an ALE does the Mid-Size Employer Transition Relief apply to me?
If I’m close to 50 FTE’s what should I do different for 2016? Note: the ALE calculation is always done on the previous year’s hours so employers have December 2015 to make adjustments for their 2016 reporting.
If I have a reporting requirement will you prepare the forms, if not who does?
Do I have potential discrimination issues that I will need to address once the non-discrimination rules are finalized?